Positive Research On The Relationship Between China's Energy Efficiency, Energy Consumption And Economic Growth

As the development of the global economy, the constraint of energy on the sustainable development of economy is becoming more and more obvious. This phenomenon makes every nation in the world pay much more attention to the field of energy than ever before, especially the field of energy economy. And more importantly, the economic growth mode of China has turned back to an adverse trend of high energy input, particularly in the areas of industry and heavy industry, which contrary to the energy policy of "taking a new road to industrialization". This adverse trend not only aggravates the contradiction between energy supply and demand, but also threats the energy security of China. Therefore, a myriad of research on China's energy input and economic growth has come into being, and energy economy has also developed rapidly in this nation meanwhile.The contribution of energy to economic growth lies in two aspects: net energy input and energy efficiency. However, most of past study merely focused on the relationship of energy consumption and economic growth, ignoring the impact of the improvement of energy efficiency. This article just study from this angle, using time series econometric methods to study the relationship between China's economic growth, energy efficiency and energy consumption. In the part of modeling, what is different from past research is that this article does not use total factor productivity to measure technological progress; instead, it assumes technological progress is embodied by the improvement of energy efficiency. After modeling a production function with energy function, this article use economic growth model with endogenous technological progress to discuss the requirement of sustainable economic growth and energy utilization: the ratio of the absolute value of the growth rate of per capital energy consumption and the growth rate of labor should be less than the ratio of output elasticity of labor and that of per capital energy consumption. In the part of empirical research, this article is also different from past study which used quality analysis or other quantity methods to measure the promotion of energy efficiency. This article uses China's relative data from 1978 to 2005, conducts a multivariable linear regression of energy efficiency to science and research investment, industrial structure, and energy consumption structure, calculates the standardized coefficient of the three factors to measure the impact of them on energy efficiency. Next, this article conducts a regression of China's real output to capital, labor, energy consumption and energy efficiency, estimates the marginal contribution of every factors to the real output. Additionally, past research used ARIMA method which concerns the character of single time series to make forecast, while this article conducts a VEC (vector error correction) model based on the relationship between energy efficiency, energy consumption and real output, and make forecasts of energy efficiency, energy consumption and real output of China in 2006 to 2015. At last, this article compares the forecasting model with energy efficiency in and the model without energy efficiency and find that the former one's forecasting capacity is better. This conclusion also proves the fundamental influence of energy efficiency to the economic growth.Besides, this article uses the regression equation of output and the forecasting results to conduct a rigorous analysis, and then proposes some suggestions about energy policy. This article finds: according to current condition of energy consumption, the growth rate of energy consumption of 2006 to 2015 is able to maintain the growth rate of China's economy at 8%, while the growth rate of energy efficiency is far less than the required level. However, taking the constraint of energy reserve into consideration, merely depending on the high energy input is not a sustainable remedy. Hence, improving energy efficiency rapidly and effectively, and exploit various renewable energy actively at the same time to increase the potential energy reserve of China, will be the focal point of future energy policy. In addition, based on this article's empirical result, the promotion of energy efficiency will depend on the increase of science and research investment, the optimization of industrial structure and energy consumption structure.